TechCrunch have just published some numbers to display how Online Ad growth has ground to a halt in the last quarter. Admittedly it’s only based on Google, Yahoo, MSN and AOL… but as TechCrunch states these 4 should serve as strong enough guide to how the rest of the industry is faring…
Up until recently, most online advertisers and PPC marketers assumed that the economic downturn would not impact them. The premise is that most companies would rather cut their spend on the more traditional and less measurable channels, such as TV, Print and Radio advertising when reviewing their budgets, and keep pushing their ads on PPC where they get a much higher ROI… if anything some people were even expecting an up-lift.
But it looks like this is beginning to impact the online world now, as the growth flattens (or practically grinds to a halt). The thing is, it’s not as one sided as companies cutting their budgets… in the case of PPC it’s not just dependent on the advertiser bidding for keywords, but also on the number of clicks consumers generate. As consumer confidence falters, so does their propensity to search for consummables and thus negatively impacting the ad revenues coming through on the likes of Google and Yahoo.
We should also not under-estimate the impact of the strengthening US Dollar. In Q1 and Q2 a huge proportion of revenue for most of these companies comes in from outside the US. The weak Dollar in the beginning of the year translated into more dollars coming from International markets… in Q3 as the US Dollar strengthened it meant less US$ coming in… thus impacting revenues.
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